122:15-1-03
Ineligibility of principal and surety; loss of program eligibility.

(A)
A principal is
ineligible for a development services agency bond guarantee under one or more of the
following circumstances;

(1)
An owner,
officer, director, or general partner of the principal is under indictment for,
or has been convicted of a felony involving protecting the integrity of
business transactions or business relationships; or a final civil judgment has
been entered stating that such owner, officer, director, or general partner has
committed a breach of trust or has violated a law or regulation protecting the
integrity of business transactions or business relationships; or

(2)
A regulatory authority has revoked,
canceled, or suspended a license of the principal, or an owner, officer,
director, or general partner of the principal, which is necessary to perform
the contract; or

(3)
The principal
has obtained a bond guaranteed by fraud or material misrepresentation.

(B)
A surety is ineligible for a
development services agency bond guarantee under one or more of the
following circumstances:

(1)
A regulatory
authority has revoked, canceled, or suspended a license of the surety, or an
owner, officer, director, or general partner of the surety, which is necessary
to transact business as a surety insurer; or

(2)
The surety has obtained a bond guarantee
by fraud or material misrepresentation; or

(3)
The surety has materially breached the EDGE bond guarantee
participation agreement with the development services
agency.

(C)
A principal may lose eligibility for
further development services agency bond guarantees if any of the following
occurs under a development services agency-guaranteed bond issued on behalf of the
principal:

(2)
The obligee has declared the principal to
be in default under the contract;.

(3)
The surety has requested reimbursement
for losses incurred under the bond; or.

(4)
The principal committed fraud or material
misrepresentation in obtaining the guaranteed bond.

(D)
A surety may lose eligibility for further
development services agency bond guarantees if any of the following
occurs under a development services agency-guaranteed bond issued on behalf of the
principal:

(1)
The surety committed fraud or
material misrepresentation in obtaining the guaranteed bond.